TaxTMI 
TaxTMI 
1987 (9) TMI 79
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....; Rs. (i) Value of immovable properties i.e. coffee land and estate 17,00,000 (ii) Value of buildings, structures, etc. therein 1,50,000 (iii) Value of articles of machinery, furniture, stock-in-trade and other movable properties 50,000 (iv) Value of coffee bushes as they are 16,00,000 &nbs....
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....; Rs. Sale price as discussed above 13,06,000 Less : Cost as discussed above 3,44,000 --------- 9,62,000 &nb....
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.... 50,000 -------- (iv) Articles of machinery, vehicles, etc. Sale price 50,000 Less : Cost 34,127  ....
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....tled to the exemption u/s 54E. He found that the partners had deposited Rs. 18 lakhs on 21-2-1979 for a period of 63 months. Admittedly the deposits have been made out of the sale proceeds of the estate. He accepted the contention that in respect of the firm the deposits can be in the names of the partners and, therefore, the requirements of sec. 54E are satisfied. He, therefore, held that the assessee would be entitled to the exemption u/s 54E. 10. Against these findings, the department has now come on appeal. The first contention of the department is that the coffee estate, shade trees and the growing crop thereon should not be considered as agricultural and, therefore, the levy of capital gains thereon should have been upheld. Now, this would take us to a consideration of the question whether the coffee estate as a whole has been sold or whether the various items alone are sold. If the coffee estate as a whole has been sold, then, it may not be proper to segregate the various items and consider these items for the purpose of capital gains. In this connection, Shri Warrier, appearing for the assessee had referred to the decision of the Kerala High Court in the case of CIT v. A....
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....ears time to remove them does not at all imply any intention that the trees should continue to receive nourishment from the land and afford agricultural income to the assessee. The most apt passage that we have been able to find which can be applied to the facts of the case is that contained in Marshall V. Green. The passage is in these terms : "The principle of these decisions appears to be this, that wherever at the time of the contract it is contemplated that the purchaser should derive a benefit from the further growth of the thing sold, from further vegetation and from the nutriment to be afforded by the land, the contract is to be considered as for an interest in land; but where the process of vegetation is over, or the parties agree that the thing sold shall be immediately withdrawn from the land, the land is to be considered as a mere warehouse of the thing sold, and the contract is for goods'. " This is the principle to be applied in this case. The assessee sold the coffee estate in its entirety. It is, therefore, reasonable to conclude that it was contemplated that the purchaser should derive a benefit from the further growth of the thing sold, i.e., of the coffee e....
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....allotment of shares and some cash. Under the terms of agreement the assessee purported to transfer 7 items of property described in the Schedules annexed to the deed. In the agreement the properties sold were allotted specific values. The consideration for a building transferred was in excess of its original cost and the question was whether the difference between the original cost and the question was whether the difference between the original cost of the building and its written down value would be deemed profits u/s 10(2)(vii) of the old Act corresponding to sec. 41(2) of the new Act. It was submitted before the Supreme Court that this was a slump sale and there was no separate sale of each of the property comprised in the business. The decision in the case of Mugneeram Bangur & Co. was relied on. The Supreme Court observed as follows : "That principle has however no application here. In the present case it is true that the entire assets of the appellant-company were sold to Messrs. Phelps & Co. Ltd. There was no separate sale of different items, but the consideration of each item of property sold was expressly mentioned in the agreement of sale. The contention that the tran....